UNITED STATES – American consumers are now facing record-high beef prices, with the cost per pound rising nearly 9% since January to an average of $9.26.
This surge follows previous record egg prices, which have since fallen due to contained avian flu outbreaks and rebuilt supply. However, experts warn that reducing beef prices will be a far more complex challenge.
According to the Department of Agriculture, prices for steak and ground beef have increased by 12.4% and 10.3%, respectively, over the past year.
Michael Swanson, chief agriculture economist at Wells Fargo, notes the fundamental difference between the two markets: “Beef is way more complicated than eggs… The cattle industry is still the ‘Wild West’ of the protein market, whereas the egg market is more ‘Corporate America.’”
This decade-long trend of rising beef prices is attributed to several factors, including shrinking cattle herd sizes—now at their lowest level in 74 years—persistent drought conditions that impact feed costs, and an increase in imported beef, all while consumer demand remains strong. Despite these record prices, cattle ranchers are struggling with “razor-thin” margins due to elevated supply costs, according to the American Farm Bureau Federation (AFBF).
The U.S. is also experiencing a significant shift in beef consumption, with imports from countries such as Argentina, Australia, and Brazil now accounting for approximately 8% of the market. Conversely, U.S. beef exports dropped 22% in May compared to the previous year.
Even with high prices, American demand for beef remains robust. Some retailers are seeking innovative solutions; Walmart, for instance, recently opened its first wholly owned and operated beef facility in Olathe, Kansas, aiming to reduce costs by working directly with suppliers.
Economists suggest that a significant drop in beef prices will likely depend on a decrease in consumer demand, potentially triggered by declining consumer confidence and household financial uncertainty. This could, however, further strain producers and ranchers. “Nobody wants to be caught holding the bag with higher-priced cattle when cattle prices start to decline, which they will inevitably,” Swanson added.
